Is Livingstone set for U-turn on PPP?

FOR three years, he has been denouncing the Government's plans to part-privatise the London Underground. For three years, he has been arguing that the capital's transport infrastructure should remain under the control of local government.

But now, London Mayor Ken Livingstone's own officials have told him that if he wants to press ahead with new transport projects, there is only one way to pay for them...by using public private partnerships.

Last March, Livingstone denounced the London Underground public private partnerships as 'a licence to rob London'. He has dragged the Government through the courts in an attempt to block its Tube plans.

Instead, Livingstone wants to raise money by issuing bonds.

But Financial Mail has obtained copies of discussion documents prepared for a meeting of Transport for London officials at the end of last month. The meeting - described as a 'chief officer's group awayday' - was led by Transport for London boss Bob Kiley, the American recruited by Livingstone to try to sort out London's chronic transport problems.

• Extensions to the Docklands Light Railway to Stratford International (for the high-speed train link) and Barking. • A huge expansion of the bus network. • Plans for a tram service in west London. • Two river crossing schemes.

It says: 'The business plan assumes Transport for London would use an alternative means of financing - a Special Purpose Vehicle structure such as a Private Finance Initiative/Public Private Partnerships.'

The document goes on to say: 'The projects that best lend themselves to this PFI structure are ones that involve new construction, i.e. the new tram schemes, the river crossings and the DLR Woolwich and Barking extensions. These financing schemes provide Transport for London with an opportunity to invest in infrastructure that will not only provide near-term benefits to transport users, but also continue-to provide benefit to Londoners in future generations.'

A spokesman for London Underground, which favours the Government's PPP financing option, described the discussion document as 'breathtaking hypocrisy.'

Transport for London said: 'We do not comment on internal documents, but the mayor is not against PPPs or PFIs. He is just against the London Underground PPP.'

The Underground spokesman added: 'For three-and-a-half years, the Mayor has opposed the London Underground PPP, but now his own people are considering similar schemes. The fact is, PPP is the only game in town and we want to get on with the work.'